The role of reputation in cross-regional buyer-supplier cooperation in public procurement
Relevance. The relevance of this study is determined by the growing trend of implementing approaches from the private sector in managing public procurement, such as suppliers’ reputation assessment. Although the suppliers’ reputation factor is a topic of current interest, both in research and in public procurement practice, there are ongoing discussions on the effects of the reputation criterion usage in public procurement, and some aspects have been insufficiently studied.
Purpose of the study. This study examines the role of suppliers’ reputation factor in terms of interregional cooperation between public buyers and suppliers at the micro and regional levels.
Data and methods. The analysis is based on a survey of public buyers in Russia, revealing procurers’ orientation on suppliers’ reputation factor and their involvement in cross-regional cooperation for micro-level analysis. With the help of open data on public procurement contracts, a grouping of Russian regions by the share of suppliers from other regions is proposed. The combination of open data analysis and survey results is then used to explore the role of reputation in terms of interregional cooperation.
Results. The analysis shows that a suppliers’ reputation factor is of particular importance when more than half of a buyers’ suppliers are from other regions. Also, suppliers’ reputation is of major significance for public buyers in regions that are more involved in contracting with suppliers from other regions. Thus, the importance of the suppliers’ reputation factor, in terms of interregional cooperation, is confirmed both at the micro level of procurers’ purchases and at the regional level.
Conclusion. For effective management of contractual relationships in public procurement, it is important to understand the effects and the role of considering the reputation of suppliers. The study focused on one of the insufficiently explored aspects of suppliers’ reputation in public procurement. The results may be of interest both to regulators and direct procurement participants – public buyers and suppliers.